Credit & Debt
I've been too loose with my money. This week I bought a new bike, made accommodations for a trip to Disneyland and spent more money on dinners out than I do on an entire month of groceries. What's turning my typical frugality into splurging? I'm getting my student loan refund on Thursday! While in the back of my mind I know that I will have to repay the $2000, another part of me is saying, "Woo hoo! I'm rich and I can finally experience the good life."
I've been there: Your financial aid check is late and you need to buy books so you can do your homework. You had an emergency and had to pay medical bills. Now you're late on rent and your landlord is threatening eviction. The good news is just because you're out of money doesn't mean you're out of options. If you can't get a fee-free, interest-free loan through a family member, check into what your school has available.
Getting a credit card has become a rite of passage for many young Americans. Whether it's acquired in high school or college, a credit card is a way to monitor extra spending as well as a tool for parents to help their kids pay for the extra life essentials. Also, building a credit score is essential for large future purchases.
Bankruptcy is perhaps the scariest ghost that can loom over one's financial well-being. In the years since the 2008 Financial Crisis, it has become a reality for millions of Americans. While the number of new bankruptcy filings for businesses and individuals has fallen considerably since 2008, there were still over one million bankruptcy filings in the financial year ending March 31, 2014.
From credit cards to home and student loans, debt is big business in America. According to Bloomberg Business Week, student debt has grown by $100 billion per year since 2008. Outstanding consumer debt stands at a record $3.2 trillion. This is the result of new debt being acquired faster than existing debt is paid off.
I quickly finished my undergraduate degree before going on to grad school. I loved learning and I loved school. I knew I would never have a problem generating income. What I did not consider was how much the $50,000 in student loan debt would cost me each month for the next thirty years. Or what could happen if life threw me a curve ball.
Two years ago I had $20,000 in my savings account, and my biggest problem was figuring out where to invest it. I found myself bragging about my savings prowess to anybody who would listen. Then everything changed when I got divorced. My $20,000 was reduced to nothing overnight. Then all of a sudden, I was looking at $6,000 in credit card debt.
Recent college graduates are more in debt than ever before. When you combine substantial credit card debt with crippling student loan payments, it may look like that financially secure future is moving farther and farther away. With this as the new normal, many young adults are now looking into bankruptcy and asking, "Am I too young to file?" The quick answer is, "No." The long answer involves a little more info.
Finding a long-term partner, a boyfriend, girlfriend or spouse can be a long and challenging road. If you've managed to snag that special someone only to discover that his or her credit history is less than stellar, while you may be tempted to overlook it, don't.
At some point during college you may have pictured yourself graduating, snagging a job and moving into a fabulous apartment where you'd be free to continue the independent lifestyle to which you've grown accustomed. But if you're now among the scores of recent college grads who find they are moving into their childhood bedroom rather than their dream apartment, take comfort in the fact that you're not alone.